A New Kind of Trade War

In true Trump fashion, the U.S. has thrown a massive punch in the ongoing trade war with China. But instead of just hitting steel and soybeans, this latest move goes after something deeper: intellectual property. And small businesses, content creators, and tech companies in the U.S. are right in the middle of it.

Tariff Shock: Numbers That Matter

So, what exactly is going on? As of April 2025, the U.S. has raised tariffs on Chinese goods to a shocking 145%. In response, China slapped an 84% tariff on American goods—including, for the first time ever, digital exports like software, movies, video games, and music.

Digital World Disrupted

This isn’t just a numbers game. This is a shift in how we treat the digital world. For years, intellectual property (IP)—like a Netflix show or a mobile app—was protected under contracts and global treaties. Now, it’s being taxed like a pair of shoes or a crate of oranges. That’s a big deal.

Why Should You Care?

If you’re a small business exporting software, licensing content, or creating anything digital, your work might suddenly be too expensive for overseas markets like China. And it’s not just about money. These tariffs could discourage innovation and make international partnerships harder to manage.

Global Rules, Local Control

The Bigger Problem: Who Controls the Rules? China isn’t just hitting back with tariffs—they’re changing how foreign companies can resolve disputes. Starting May 1, 2025, most intellectual property issues involving foreign companies will be handled by Chinese courts or domestic arbitration. That means if your contract says a dispute will be settled in New York or Singapore, China might say, “Nope, it’s our call now.”

Tough Road Ahead for U.S. Businesses

For big brands like Disney or Netflix, this might mean opening new offices inside China just to avoid the tariffs. But for smaller players, that’s not realistic. This trade war could shut the door on doing business in one of the world’s largest markets—or make it so expensive that it’s not worth it.

Smart Moves for Small Businesses

• Re-think your contracts – Make sure they clearly say who owns improvements and how IP is protected.
• Segment your IP – Only share what’s necessary with foreign partners. Keep core assets secured at home.
• Plan for enforcement – Understand that protecting your rights abroad is getting harder. Build in a safety net.
• Adjust your pricing – Factor legal risks and potential tariffs into your costs.
• Register your IP abroad – Especially if you rely on China for production or distribution.

Looking Ahead: Trade and Tech Collide

This isn’t just a one-off policy change—it’s a long-term shift. Tariffs aren’t going away anytime soon. And with digital exports becoming a battleground, the rules of global trade are being rewritten. If the U.S. wants to protect its innovations, it has to rethink not just deals—but the systems that back them.

Conclusion: Deal or No Deal?

Trump’s “Art of the Deal” may have worked once, but in this complex trade landscape, it’s looking more like a game of high-stakes poker—one where the rules keep changing. For American businesses, especially the small and scrappy ones, staying informed, flexible, and protected is no longer optional. It’s survival.